The cost of living crisis, the unions & more anti-union legislation – Lord John Hendy QC exclusive


“The response of the government to the unfolding catastrophe is pure class war.”

Lord John Hendy QC

By Lord John Hendy QC

The cost of living crisis is about to hit us like a tidal wave.

Inflation was running at 9.4% pa in June according to the Bank of England. It expects inflation to rise to ‘just over 13%’ in the fourth quarter of 2022.

We know the cause . The rise in energy prices has been like an undersea eruption which has created (or provided the opportunities for) waves of price rises in all other commodities, waves which are crashing on working class shores with the force of a tsunami.

The price of energy dramatically increased in early 2022. This was not because of war or increases in the cost of exploration, extraction, refining, or transporting oil and gas.

It was because the energy companies believed that they could get away with it. In short: capitalism. The profits of Shell, BP, Chevron, and Exxon Mobil consequently doubled to $58.2 billion – for the first six months of 2022. In July, Centrica (which owns British Gas) declared profits for the year of £857m, six times as much as its profit of £140m in the previous year.

But the energy suppliers are not the only profiteers. Wage cuts mean more money for the employer. Median wage increases are, on average, currently running at around 4.4%. With inflation at 9.4% that is a 5% cut in the real value of wages. When inflation reaches 13%, if wages continue to increase at 4.4%, the real value of wages will fall by 8.6%pa. A nice extra slice for the employer.

To speak of an ‘average wage increase’ is to disguise the fact that in the public sector wages are rising at only 2-3% and, for the lowest earning tenth of all workers (3 million workers) the wage increase is a mere 1.3% pa.

This sudden transfer of wealth from labour to capital is unparalleled since the 1930s.

That why the current fight by railway workers, mail and call centre workers, dockworkers, nurses and junior doctors, bin workers, Co-op coffin makers and the rest is so important. They fight for the entire working class.

This period has been compared to the 1970s. But it is very different.

The 1970s was the most equal decade in British history. Wages took a greater share of GDP than ever before or ever since. That was achieved because 85% of workers had their terms and conditions set by collective bargaining between unions and employers. Successive governments demolished collective bargaining in all but a few sectors. Less than 25% of workers are covered today. In fact, collective bargaining over wages is a lot less than that because so many workers in the public sector have their wages set either by a Pay Review Body or by governmental wage freeze.

The fact is that the vast majority of UK workers are not in a position to negotiate better wages; for them its ‘take or it leave it’. And for most, they can’t afford to leave it. They don’t need the Governor of the Bank of England to tell them to exercise wage restraint, their employers do it for them.

That’s why the fight of those on strike this summer, who still have the right to bargain collectively, fight for the whole working class.

Speaking of the 1970s, perhaps we should consider the case of the dockers imprisoned in Pentonville 50 years ago, and released after the TUC called a General Strike (completely unlawfully).

Meanwhile the response of the government to the unfolding catastrophe is pure class war. The Tories dole out a few hundred quid of taxpayers’ money to the poor so they can pay the rich energy companies. Sunak offers to cut taxes – an offer which: benefits most those who pay most taxes; does not help the 21 million adults earning below the tax threshold; and punishes those who rely on the public services those taxes would have paid for.

For the profiteers, the Tories impose a limited ‘windfall tax’ full of loopholes instead of a ‘profiteering tax’ to extract every penny of extra profit – or, better still, putting the energy companies into public ownership.

And, of course, while the unions fight for the workers, further legal shackles are proposed to stop them. Unions are already heavily regulated and constrained. In 1997 Blair rightly described our laws as ‘the most restrictive on trade unions in the western world.’ Since then we have had the Trade Union Act 2016, and, this year, more restrictions on noisy pickets, an increase in damages payable by unions (£1 million for big unions), and the legitimising of agency labour to break strikes.

Earlier, the government threatened to require minimum staffing levels during strikes in certain sectors. Now Truss proposes that within each industry of ‘critical national infrastructure’ there will be ‘tailored minimum’ service levels and tailored minimum voting thresholds for industrial action. For all other sectors the minimum threshold of 40% of voters in the balloting constituency is to be increased to 50%.

‘Critical national infrastructure’ is not defined but we may assume that it includes the ‘key workers’ who the government clapped every Thursday during lockdown.

And there’s more. Truss proposes that strike notice is to increase to four weeks instead of the current fortnight; and that, within the current 6 month limit on the validity of an industrial action ballot, action will only be permitted a specified number of times with, it seems, cooling off periods between.

The icing on the cake is Truss’s proposal to bar unions spending their own funds, contributed by their members, on strike pay to their members.

All these measures violate international laws ratified by and binding on the UK. But unions and workers are not going to wait for the lawyers to challenge these measures; they are going to vote with their feet. Solidarity to them.

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